If you can not measure it, you can not improve it.Lord Kelvin
Hey you, Mrs. or Mr. Chief Operating Officer!
Are you looking for a great New Year’s resolution for your company?
Document all your business processes for Commercial Operations, Enterprise Risk Management, Accounting, and Finance, and Information Services. And then measure how long it takes to perform each task.
Time is money, after all.
Why should you care about documenting and measuring workflows?
I give you three solid reasons:
- Assist onboarding and training new hires.
- Automate commoditized tasks and focus on higher-value activities.
- Create a base case and potential ROI for software projects.
Onboarding and Training New Staff
If 2020 is forever known as the Great Teleworking Experiment, 2021 will go down in history as the Great Resignation.
It’s no secret that significant staff turnover has a negative impact on your company’s bottom line. The average cost of a lost team member is estimated to be 38% of their annual income.
Employee retention begins the moment a new employee walks through the door. Onboarding is a crucial aspect of their journey. This approach ensures that employees have the knowledge, insights, and tools they need to succeed in their jobs.
Updated business process documents provide a great beginning to onboarding and training new staff.
They also provide a unique opportunity for business process improvements.
Why so, you ask?
During my career in management, I always encouraged new hires to ask many questions and not to be afraid to challenge the status quo.
Some of our best process improvements came from two simple questions from a new hire.
Why do you do it that way?”
Have you ever considered doing it this way?”
Documented workflows should be living and breathing documents, not something you dust off every seven to 10 years when you begin a major software project.
Automate Commoditized Tasks and Focus on Higher-Value Activities
When I began a new career as an energy trader back in 1998, friends and family asked me what an energy trader does.
I point and click as fast as humanly possible and try not to make any mistakes.”
That was my story, anyway.
I executed perhaps a dozen energy trades each hour on the telephone. But that was easy work.
Ordering transmission, creating tags, and entering deals into the ETRM was a simple game of beat the clock involving countless keyboard strokes. Some deals contained four or five transmission paths.
There was ample opportunity to transpose numbers or fat finger the wrong volume, transmission reservation number, or price.
The late ’90s were the stone age of technology compared to today.
But we are faster and hopefully smarter today.
Low-value data entry tasks can and should be automated to allow people to focus on higher-value activities like interpreting data and making predictions based on pattern recognition. Documenting and timing workflows religiously shine a light on areas where commoditized tasks can potentially be automated.
Base Cases and ROI
A base case scenario acts as a reference point for business planning and provides leadership with a basis for comparison. Base cases can and should change.
Documented business process workflows provide a base case whereby business process improvements may be accurately measured and evaluated.
About every seven to 10 years, commodity shops inevitably face a simple but difficult question.
Is my Commodity Trading Risk Management (CTRM) solution adequate for the next decade?
When it comes time for the evaluation phase, a key question will center on the value added by any solution.
How do you adequately answer that important question?
By maintaining an updated business process document detailing the steps and time required for your workflow tasks. Calculating annualized hours saved provides an excellent metric for assisting a decision to build or buy a new solution.
In football, the hurry-up, no-huddle offense (HUNH) is a method of limiting or disrupting defensive plans and flexibility by avoiding or shortening the huddle.
The Cincinnati Bengals were the first to use the no-huddle strategy, and the Buffalo Bills, dubbed the “K-Gun,” popularized it in the 1990s under head coach Marv Levy and offensive coordinator Ted Marchibroda.
The Bills became the only team in NFL history to appear in four straight Super Bowls from 1991 to 1994, with Jim Kelly at the helm of the no-huddle “K-Gun” offense. The Bills are considered the only team to use the no-huddle system consistently and totally throughout an entire game. In fact, they executed the strategy for multiple seasons.
The key ingredient to the success of the no-huddle offense is speed.
When done right, it is devastatingly difficult to defend. Think of a no-huddle, hurry-up offense as a 1-2 punch combo.
Automating low-value business processes is like implementing the no-huddle offense on your trading floor.
Documented business processes provide clues on how to implement your own no-huddle offense.
New Year Resolutions
About 15 years ago, my team and I entered the final stage of a major software replacement project for our energy trading solution. Daylight was near, and the dark days of parallel testing were about to become a thing of the past.
And then, I got hit with a surprise question from the project manager that I could not answer.
“Did you know about these two dozen reports going out to clients?”
Unbeknownst to the project team and leadership, nobody had a clue about how many customized reports had been created over the years and sent to clients.
After we spent a great deal of time researching the origin of the reports and then trying to determine if the new software solution could replicate these reports, two things happened.
We determined that half of the reports were not being read by the clients.
We made a resolution to maintain all business reporting in our business process workflow documentation.
As we approach the holiday season and ponder the typical year-end resolutions for 2022, you may want to consider a valuable business goal.
Document and measure all your business process workflows.
You will improve employee onboarding, focus on the highest-value tasks, and look much smarter to your Board when seeking funds for your next major software implementation.
Best of love and luck to all in 2022!